Tourism NZ is relying on hobbits to boost a flagging industry, promising that the coming Peter Jackson films will be bigger than the Rugby World Cup. But some experts warn it’s a risky strategy and not a true reflection of who we are.

They wandered past the Lake, strolled by the Party Tree and snapped pictures of Bag End.

They were mostly from Europe and North America, a handful from Asia, and they'd come to a farm of rolling hills near Matamata on a recent weekday morning to see the spot where Peter Jackson created Hobbiton.

Some said the location was on their "must-see" list; others had come on the spur of the moment. None said The Lord of the Rings or The Hobbit films had influenced their decision to come to New Zealand. "It's very expensive to come here just for the movies, you'd have to be a nerd," says 29-year-old German backpacker Uwe Dippert.

Mexican Rosa Riojas had competed in the World Triathlon Championships and was doing some sightseeing before flying home.

"This is nice, but you have a lot of beautiful places and I think the vineyards are much more interesting - I didn't know you produced so much wine."

But it's not grapes that Tourism New Zealand is promoting in its major campaign this year.

The government agency is spending $10 million of its $65m marketing budget on "100% Middle-earth, 100% Pure NZ", aimed at persuading potential visitors that "the fantasy of Middle-earth is in fact the reality of New Zealand".

An advertisement now screening overseas features sweeping Lord of the Rings-style scenery and a voiceover talking of giant eagles, ancient caves, warrior princesses and "wizards turning water into wine".

Citing research which found a high level of awareness of The Hobbit movies among potential visitors, Tourism NZ and Tourism Minister John Key seem convinced people will flock here on the strength of the films.

"New Zealand doesn't yet understand what a big deal this is," Tourism NZ's general manager of corporate affairs Chris Roberts wrote in an email. "In many of our key markets, The Hobbit is going to give New Zealand more exposure than the Rugby World Cup."

Key has a lot riding on the success of the films. His Government controversially changed labour laws and gave $95m in grants and subsidies to Warner Bros to get them made here, and has been acting as something of a roving ambassador for The Hobbit.

"The number of people who'll watch the movies . . . is likely to be phenomenal. We've got massive capacity to cross-sell New Zealand . . . it's a pretty low-risk bet."

But others are not convinced.

Bruce Poon Tip, the Canadian founder of G Adventures, which recently announced its arrival in New Zealand, says it's a high-risk strategy. "It's a long stretch for you to look at The Hobbit, to expect someone to say ‘great, I'm going to New Zealand now for my holiday'. It's a very odd approach, it's not like the movie takes place in New Zealand."

Former Tourism NZ board member Mike Tamaki of Tamaki Group, which runs Maori cultural tours, says it's a short-sighted, "knee-jerk" campaign that benefits a small sector of the industry.

"What Tourism NZ is doing is promoting a product rather than a destination and I think that's a really drastic, big mistake."

ELEVEN YEARS after the first Lord of the Rings movie, New Zealand has hobbit fever again.

New Zealand Post is making official stamps and legal-tender commemorative coins, Air New Zealand is turning two planes into "flying billboards" and Wellington is dusting off the red carpet for the premiere of The Hobbit: An Unexpected Journey on November 28.

For some, it's cringeworthy. Simon Milne, director of the New Zealand Tourism Research institute, says the approach could be counter-productive with the "high-yield, experienced, knowledgeable traveller", who could see the Middle-earth comparison as "naff".

"I just think we've got a lot of eggs in one basket. I just don't know if it's a good look for a country to be seen to be so enthralled with a movie that we change labour legislation, we do all these other things . . . and sort of hang the national brand on this."

Milne believes the 100% Pure campaign has reached its use-by date, with international media

already pointing out the hypocrisy.

"We have to be careful about branding ourselves Middle-earth. It's not who we are, it's a film set. We need to do more than that, we have to go deeper than that. If we look at global trends in tourism, there's a real focus on authenticity."

Milne says the films might provide a short-term benefit, but does not believe they will lead to a sustained increase in visitors.

"If I was running a business and was holding The Hobbit up as the great white hope, I think I would be in a fairly desperate situation."

Tamaki believes the next "layer of value" that should have been added to the 100% Pure campaign is the "people component", telling our stories.

"My biggest concern is strategically, in the long term, what are we trying to say about New Zealand? How does Hobbitville fit into the long-term strategic image?"

The tourism industry is struggling. Arrivals in the year to September were up slightly overall on the back of a 38 per cent increase in visitors from China, but our traditional, most lucrative markets are sliding - British visitors are down 14 per cent, the United States 3 per cent, and Japan 7 per cent. The amount tourists spent, $5.6 billion, didn't increase at all on the previous year.

Tourism NZ has come under growing criticism that its promotion of New Zealand is failing. In July, departing Air New Zealand chief Rob Fyfe and chairman John Palmer appeared before a select committee to call for urgent action by the Government and industry to turn around our diminishing appeal for long-haul visitors.

Tamaki says something different is needed.

"Numbers in the country . . . are the big problem right now. We don't need them in 2013 or 14, we need them now.

"What we need is to put a message out there in the world that is a call to action.

"This film wouldn't be a call to action. From that perspective it's a failed campaign."

Poon Tip was keynote speaker at the 10th anniversary of the 100% Pure NZ campaign, and says it's the envy of tourism boards the world over. But he doesn't rate the Middle-earth campaign.

"Just across the pond from you guys, they spent tens of millions making the movie Australia and promoting it, it was their major campaign to tie a Hollywood movie to a destination. It was a disaster, really."

Poon Tip says The Lord of the Rings movies worked for New Zealand because they were seen as groundbreaking.

"I think this movie will be successful, but it won't be as groundbreaking in the use of people and technology," he said. "It won't have that appeal."

And, he says, there's always the chance the films will bomb. "You're putting the fate of your country's tourism in the hands of a director, I just think that's a very unusual approach."

Brian King, a professor of tourism at Hong Kong Polytechnic University, is an enthusiast for the Middle-earth campaign, but warns there are risks. "Seeing a film is not going to prompt someone to go to a destination . . . but it does help build a positive impression. New Zealand is just a tiny player on the world map and something like The Lord of the Rings is mainstream global media."

King says his main concern would be how it's received in the biggest growth market for tourism - China.

"How does something like [The Hobbit] translate to an Asian audience? I don't really know the answer to that."

King says tourism operators should not expect to see people flocking here because of the movies.

"With very occasional exceptions, such as Crocodile Dundee which had a major impact on the US market . . . very few campaigns have made a big difference. The idea that it's going to lead to some bonanza is a bit naive."

But King has no problem with using fantasy to promote a country.

"I think travel is partly about experiences we have as children.

" I think some of the imagery of The Lord of the Rings appeals to the child in us. In the right market I think that's quite powerful."

CHINESE FILM star Yao Chen has 21 million followers on Sina Weibo, the Chinese version of Facebook, and it is to her that Tourism NZ is turning in the hope of breaking through in China with the Middle-earth message.

Chief executive Kevin Bowler says it's hoped Chen will come to Wellington for the premiere, bringing a contingent of media with her, and blog about it afterwards.

Bowler says research suggests 70 per cent of Chinese already considering coming to New Zealand are aware of The Hobbit movies, although he admits research out of China is unreliable. "The truth is, we don't have certainty about China, no-one does."

Bowler says feedback on the Middle-earth campaign has been overwhelmingly positive, with increased requests from international media to come here and a general heightened interest in New Zealand. He defends Tourism NZ's performance, saying the growth in the Chinese and Australian markets is not achievable right now in Europe and the US.

"It's a very tough time and a time of great change. A lot of markets are plagued by economic challenges."

The Middle-earth campaign is just one part of Tourism NZ's strategy, he says.

Is there a plan B if the films are not successful?

"Absolutely. We're not resting everything on the films. We're working on the basis that they will be successful and we are associating 100% Pure with Middle-earth for a period of time. That period could be all of three years or it could be a lot shorter than that if the films weren't as widely liked as The Lord of the Rings were."

More than a decade on from the first films, Bowler says, New Zealanders are still making money out of LOTR product.

"We've certainly learnt a bit over those 10 years. We probably underestimated the value The Lord of the Rings films brought to New Zealand - we're not about to do that this time."

Martin Snedden, former head of the Rugby World Cup organising committee and now chief executive of the Tourism Industry Association, says the cup was easier to measure, in that it was a one-off event over 45 days that brought 150,000 people into the country.

The Hobbit, he says, is a "different beast" as it's a trilogy of films over years, but he believes the impact will be no less.

"There do seem to be people who are as enthusiastic about The Hobbit as there are people who like rugby. You have your fanatics who are prepared to travel to where the movies happened."

Some tourism operators sat back and expected an automatic benefit from the World Cup, Snedden says. They should not make that mistake with the films.

"People need to think carefully about what is likely to happen from this. It is not going to be dramatic within 45 days, it's going to be spread over a period of time."

Grant Webster, chief executive of campervan company Tourism Holdings, says there needs to be a clear vision of what the Middle-earth campaign is trying to achieve.

"People who are thinking of travelling to New Zealand won't suddenly see The Hobbit and go ‘I'd better go now'. But, in terms of creating presence and getting New Zealand back into people's minds, I think it's absolutely something we should be driving."

The next step, Webster says, is to ensure the industry responds. "We've got to have the right kind of product and price promotions out there. I'm not saying we discount the country to ridiculous levels, but we . . . have to make the most of it."

Key says Warner Bros will be spending $100m marketing The Hobbit (part of the Government's deal was to offset $12m of the company's marketing costs) and it makes sense to "leverage" off that. He says we shouldn't be "too precious" about our marketing campaigns being authentic representations of who we are.

"I think with these marketing slogans, they've obviously got to reflect a degree of reality or otherwise they can backfire on you. But they are selling an image. It's like McDonald's - ‘I'm lovin' it'. I'm sure not every person who eats McDonald's is loving it, but a lot of people are enjoying it, and it's like that with New Zealand."